Report to EU Commission confirms oilsands are high-carbon fuel source

Given that oilsands products aren't currently shipped to Europe in significant quantities, you may be puzzled by all the hoo-ha
about the Europeans' clean fuel law.

Let us explain. The European Union's fuel quality directive
requires oil companies to reduce greenhouse gas emissions by six per cent by
2020, compared to 2010 levels. To implement this law, the European Commission is
in the process of setting carbon values for various fuels — including oilsands.
At first, oilsands was set at 107 grams per megajoule, compared to conventional
oil at around 86 grams per megajoule (about 23 per cent more greenhouse gas intensive), but Canada
made several objections and succeeded in making the oilsands value disappear — temporarily.

Why are Canadian politicians aggressively lobbying to
derail a European fuel directive if there are no significant plans to export oilsands crude to
Europe? The truth is, Canadian and Albertan officials are fighting tooth and
nail to prevent oilsands being officially classified as a high-carbon fuel anywhere — the reason being that if a major body such as the European Union does so,
it'll be much harder for Canadian officials to continue claiming the oilsands are
an environmentally responsible source of oil. Of course, they're also afraid other jurisdictions
will follow Europe's lead.

Despite the Canadian government's lobbying efforts, the
European Commission has committed to assigning a new value to oilsands in 2011
and as such commissioned an independent, peer reviewed analysis by Stanford
University's department of energy resources engineering, which
was released last week.

Stanford professor and life cycle analysis expert Adam
Brandt based his report
on six previous studies and concludes that upstream emissions (extraction and
upgrading) are more than five times greater for oilsands than the European Union
average for conventional oil.

The report finds that lifecycle emissions (sometimes
referred to as wells to wheels) are on average 23 per cent higher for oilsands,
compared to European Union average conventional oil.

Further, the report also omitted the Cambridge
Energy Research Associates (CERA) study (that the
oil industry and the Canadian and Albertan governments like to quote from),
because the methodology was not transparently described. The CERA report pegged oilsands
lifecycle emissions at just five to 15 per cent more carbon intensive than
conventional oil, but several
issues have been raised about their analysis.

Not surprisingly, Alberta Energy Minister Ron Liepert is
challenging the Stanford study and will no doubt be raising his concerns before the
European Commission. It will be important for the European Commission to
recognize that there is already significant variation in the estimates made of greenhouse
gas emissions from oilsands and part of that variation is due to what is
actually being measured.

In a recent publication, Pembina outlined the
factors that caused this wide variation so decision-makers are clear on how to
approach decisions before them. Ideally, studies are comprehensive and consider
all of the different emissions that come from the production of oilsands. Unlike
the CERA report, the Stanford University report prepared for the European Commission closely follows our
recommendations to fully document what is being measured, and how, in a
transparent manner.

After Brandt evaluated all of the studies, he concluded that
greenhouse gas emissions from oilsands production are "significantly different
enough from conventional oil emissions that regulatory frameworks should
address this discrepancy."

This latest report serves to solidify the fact there is no
valid debate about whether or not the oilsands are significantly more
greenhouse gas intensive than conventional oil sources — there is a spin campaign
by government and industry and then there's the truth. It's well past time for government and industry to take the steps to
achieve significant reductions in the greenhouse gas intensity of oilsands
production.